The S&P 500 and Nasdaq Composite achieved record high closes on Monday as markets evaluated the manufacturing sector data for November and comments from Federal Reserve officials. The technology-focused Nasdaq surged by 1% to reach 19,404, while the S&P 500 increased by 0.2% to close at 6,047.2. In contrast, the Dow Jones Industrial Average saw a decline of 0.3%, ending at 44,782.
Among sectors, communication services emerged as the leader in gains, whereas utilities experienced the largest decrease. In recent economic news, the contraction in the US manufacturing sector showed signs of improvement, exceeding expectations over the previous month, as indicated by separate surveys conducted by the Institute for Supply Management and S&P Global (SPGI).
The manufacturing PMI saw a rise beyond projections for November; however, BMO Capital Markets commented, 'We expect the gauge to stay subdued until rates come down meaningfully.' They added that factory activity remains one of the few weak spots in an otherwise robust economy. Upcoming reports slated for release on Wednesday include the ISM and S&P Global's data regarding the US services sector from the previous month. Online spending during Black Friday matched expectations, amassing $10.8 billion according to data from Adobe Analytics on holiday shopping trends. In the bond market, the yield on two-year US Treasuries increased by one basis point to 4.18% as of Monday, while the rate for 10-year bonds remained stable at 4.19%. Federal Reserve Governor Christopher Waller expressed that he is 'leaning toward' implementing a rate cut during the policymakers' meeting scheduled later this month, unless unexpected economic data emerges.
He proclaimed, 'Policy is still restrictive enough that an additional cut at our next meeting will not dramatically change the stance of monetary policy and allow ample scope to later slow the pace of rate cuts, if needed, to maintain progress toward our inflation target.' In a related statement, Atlanta Fed President Raphael Bostic noted that the route to achieving a 2% inflation rate may be challenging but remains feasible, as both economic growth and the labor market show signs of cooling. On Monday, the probability of a 25-basis-point interest rate cut on December 18 surged to approximately 77%, up from 66% on Friday, as indicated by the CME FedWatch tool. In corporate news, shares of Super Micro Computer ($SMCI) soared by nearly 29%, making it the top performer within both the S&P 500 and Nasdaq.
The artificial intelligence server manufacturer disclosed that a committee tasked with investigating the company’s governance found no proof of fraud or misconduct, leading to recommendations for appointing a new finance chief among other measures. Intel ($INTC) announced the retirement of Chief Executive Pat Gelsinger effective Sunday, as the chipmaker created a new role of products CEO while transitioning towards a more streamlined operating structure.
Intel's shares ended the day down by 0.5%. In a downturn, US-listed shares of Stellantis ($STLA) plummeted by 6.3% after the automaker revealed the resignation of CEO Carlos Tavares more than a year ahead of his contract expiration. Regarding the broader market, S&P 500 companies reported a substantial quarterly earnings increase of 8.2% compared to the previous year, while revenue growth reached 5.1%, showcasing a 'robust' performance as the earnings reporting cycle approaches its conclusion, as noted by Oppenheimer Asset Management in a Monday update to clients. Additionally, West Texas Intermediate crude oil prices nudged up 0.1% to $68.06 per barrel on Monday.
Meanwhile, gold prices dipped 0.8% to $2,660.60 per troy ounce, and silver fell by 0.4% closing at $30.97 per ounce..